Question

ABC Company has 300,000 shares of common stock authorized, 270,000 shares issued and 100,000 shares of treasury stock. ABC declares a dividend of $1 per share. What is the total amount of dividend that will be paid?

Answer 1

$170,000

Step-by-step explanation:

Given that,

Company has 300,000 shares of common stock authorized

270,000 shares issued and 100,000 shares of treasury stock

Treasury shares not required for Pay dividend.

Therefore, the dividend is pay only for:

= Issued shares - Treasury stock shares

= 270,000 - 100,000

= 170,000

Hence, the total amount of dividend that will be paid:

= 170,000 shares × Dividend per share

= 170,000 shares × $1

= $170,000